October 2, 2017
The biggest fight over whether to fix a drafting error in a state rural sustainability bill is whether the fix requires voter approval.
Senate Republicans are adamant that voters in affected special districts should weigh in. Democrats and those who have fought similar battles in the courts disagree.
Monday, the Legislature returned to the Capitol to fix a drafting error in Senate Bill 17-267, as ordered by Gov. John Hickenlooper, who had signed the bill May 30.
The bill consolidated two sales taxes on recreational marijuana – a state tax of 2.9 percent and a special tax of 10 percent – and raised the tax to a voter-approved maximum of 15 percent.
The change effectively eliminated the state sales tax, and therein lies the problem. Nine special districts rely on those sales taxes, but the bill did not provide an exemption so they could continue to collect their share.
Eschewing court opinions on the issue, which involves the constitutional Taxpayer’s Bill of Rights, Republican Senate Majority Leader Chris Holbert of Parker said: “I did not swear an oath to uphold the opinion of the court. I’m bound to uphold the Constitution.”
The Constitution is clear, Holbert said. After December 1992, since TABOR passed, voters must decide on any tax policy change.
“Senate Bill (17-267) was a tax policy change, and here we’re being asked to change it again,” he said.
Holbert said his constituents are adamant that he protect TABOR, which requires voter approval of a new tax, tax rate increase, extension of an expired tax “or a tax policy change directly causing a net tax revenue gain to any district.”
Not so fast, said attorney Mark Grueskin.
Grueskin said he has won three lawsuits involving TABOR in cases before the Colorado Supreme Court.
In a 1995 case, an Arapahoe County assessor had to correct errors on abatements and refunds. To ensure that it wouldn’t lose money, the school district there imposed a mill levy without voter approval. The court said the mill levy was not a tax increase because it addressed an error and anticipated that prior votes had been made to ensure enough revenue to pay off bonds, he said.
In a case pitting Mesa County commissioners against then-Gov. Bill Ritter, the court said tax policy changes apply when revenue would exceed the TABOR limit, and henceforth voters would decide whether to let the district spend those extra dollars, Grueskin said.
Those revenues are anticipated in the current situation, he said. “All of those revenues are in their districts’ budgets and as a matter of law cannot comprise a tax policy change.”
Special districts could sue, based on the original bill’s title – Sustainability of Rural Colorado – he suggested.
But, he said, “The only people to benefit from this are in one category – me and my profession of lawyers. I would think (SB 17B-001) would be preferable.”